Consumer Search Costs and the Incentives to Merge Under Bertrand Competition

J. Moraga-González, Vaiva Petrikaitė
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引用次数: 2

Abstract

This paper studies the incentives to merge in a Bertrand competition model where firms sell differentiated products and consumers search the market for satisfactory deals. In the pre-merger market equilibrium, all firms look alike and so the probability a firm is next in the queue consumers follow when visiting firms is equal across non-visited firms. However, after a merger, insiders raise their prices more than the outsiders, so consumers search for good deals first at the non-merging stores and only then, if they do not find any product satisfactory enough, at the merging stores. When search cost are negligible, the results of Deneckere and Davidson (1985) hold. However, as search costs increase, the merging firms receive fewer customers, so mergers become unprofitable for sufficiently large search costs. This new merger paradox is more likely the higher the number of non-merging firms.
Bertrand竞争下的消费者搜索成本与并购动机
本文研究了在Bertrand竞争模型中企业销售差异化产品,消费者在市场上寻找满意交易的并购动机。在合并前的市场均衡中,所有的企业看起来都很相似,因此当消费者访问企业时,企业成为下一个排队的企业的概率在未访问的企业中是相等的。然而,在合并之后,内部人员比外部人员提高价格更多,因此消费者首先在未合并的商店寻找好的交易,如果他们没有找到足够满意的产品,才会在合并的商店寻找。当搜索成本可以忽略不计时,Deneckere和Davidson(1985)的结果成立。然而,随着搜索成本的增加,合并公司获得的客户越来越少,因此,对于足够大的搜索成本,合并变得无利可图。不合并公司的数量越多,这种新的合并悖论就越有可能出现。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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